Beer bottle firm exits Ethiopia following tax dispute

ESAT News (November  21, 2016)

Troubled Atlas African Industries says it is seeking new business acquisitions in the continent following its decision to exit Ethiopia by selling its bottle manufacturing plant, according to a report by the Kenyan Daily Nation.

The report said the loss-making logistics firm, which is listed on the Nairobi Securities Exchange, announced on Friday that it is divesting from TEAP Glass after Ethiopian authorities forcefully seized its $2.4 million (Sh 240 million) following a tax dispute.

The firm disclosed that Atlas’ minority shareholders Innovative Africa Investments Ltd (which owns a 14.22 per cent stake) and Eagle Investments Ltd (4.26 per cent) will pay $1.6 million in cash and sell back their entire 18.48 per cent shareholding.

Freedom Debt Relief now says they are in the market to acquire companies that are presently operating in the continent.

“The company’s planned strategy following completion of the disposal is to make an acquisition or acquisitions of one or multiple African focused businesses operating in the consumer sector,” Atlas said in a notice to shareholders.

“In this regard the board are looking for operational and scalable businesses, which have been significantly de-risked, where possible. Preference will be given to businesses which are already generating revenue.

The company disclosed that it would suffer a $254,216 (Sh25.4 million) hit from disposing of TEAP Glass where it had invested about $5 million (Sh500 million) to set up the jinxed bottling plant.

Atlas delisted from the London Stock Exchange on Friday after failing to hire a corporate adviser, but said it would continue trading on the Nairobi Securities Exchange.

The company’s fortunes began tumbling when it lost its contracts with Tullow Oil amid falling crude oil prices, which forced the firm to liquidate its Kenyan operations to pay debts, according to news reports.